NEW YORK, Sept. 18 /PRNewswire-FirstCall/ -- Hudson Highland Group,
Inc. (Nasdaq: HHGP) today announced that it has signed a definitive
agreement to sell its Highland Partners executive search business to
Heidrick & Struggles International, Inc. (Nasdaq: HSII) for a maximum of
$51.6 million in cash:
* $36.6 million payable at closing, subject to a net working capital
adjustment, of which the company will pay $9.5 million to partners of
the business to complete the transaction; and
* up to $15 million subject to the achievement of certain future revenue
metrics by that business in 2007 and 2008.
The deal is expected to close in the fourth quarter of 2006, subject to
a minimum number of Highland Partners consultants agreeing to join Heidrick
& Struggles and customary closing conditions. Hudson Highland Group expects
to net $20 million at closing after transaction and related fees, and will
record a gain on the sale of approximately $20 million. The company will
treat the Highland Partners business as a discontinued operation, and plans
to use approximately $14 million of the proceeds to pay down a portion of
outstanding debt.
"This is a sound strategic move for both organizations," said Jon
Chait, chairman and chief executive officer of Hudson Highland Group. "The
divestiture will help us focus on core Hudson management recruitment,
professional staffing and talent management solution markets while allowing
Highland Partners to build upon its track record of success in a dedicated
executive search business model."
Guidance
The company also confirmed its 2006 third quarter guidance of $355-370
million in revenue and $7.5-8.5 million in EBITDA, prior to classifying
Highland Partners as a discontinued operation, and will announce fourth
quarter guidance in conjunction with its third quarter earnings release.
Hudson Highland Group
Hudson Highland Group is one of the world's leading professional
staffing, retained executive search and talent management solution
providers. We help our clients achieve greater organizational performance
by attracting, selecting and developing the best and brightest people for
their businesses. Our approximately 3,800 employees in more than 20
countries are dedicated to providing unparalleled service and value to our
clients. More information about Hudson Highland Group is available at
http://www.hhgroup.com.
Safe Harbor Statement
This press release contains statements that the company believes to be
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other than statements of
historical fact included in this press release are forward-looking
statements. Words such as "anticipate," "estimate," "expect," "project,"
"intend," "plan," "predict," "believe" and similar words, expressions and
variations of these words and expressions are intended to identify
forward-looking statements. All forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ
materially from those described in the forward- looking statements. These
factors include, but are not limited to, the company's ability to complete
the disposition of the Highland Partners business to Heidrick & Struggles
on anticipated terms and timetable; risks and financial impact associated
with the disposition of the Highland Partners business; the impact of
global economic fluctuations on temporary contracting operations; the
cyclical nature of the company's executive search and mid- market
professional staffing businesses; the company's ability to manage its
growth; risks associated with expansion; the company's reliance on
information systems and technology; competition; fluctuations in operating
results; risks relating to foreign operations, including foreign currency
fluctuations; dependence on highly skilled professionals and key management
personnel; the impact of employees departing with existing executive search
clients; risks maintaining professional reputation and brand name;
restrictions imposed by blocking arrangements; exposure to
employment-related claims, and limits on insurance coverage related
thereto; government regulations; and restrictions on the company's
operating flexibility due to the terms of its credit facility. Additional
information concerning these and other factors is contained in the
company's filings with the Securities and Exchange Commission. These
forward-looking statements speak only as of the date of this press release.
The company assumes no obligation, and expressly disclaims any obligation,
to review or confirm analysts' expectations or estimates or to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.